Regions Financial (RF) has been weak the past 12 months but a durable bottom has not been seen and further declines are possible in the weeks ahead. Today's downgrade by TheStreet's Quant Ratings service adds to our negative opinion.
In this daily chart of RF, above, we can see that the price of RF has been under pressure in June, giving back most of its gains from its February low. Prices are below the declining 50-day and 200-day moving averages. RF recently bounced but stopped well short of the 200-day average. Prices made new highs in early June but the On-Balance-Volume (OBV) line did not match it.
Of greater concern was the momentum indicator which made a much lower high in early June diverging from the higher price high. As prices have worked lower in June the momentum study has also worked lower.
In this weekly chart of RF, above, you can see a clear pattern of lower highs and lower lows. Prices are below the declining 40-week moving average line. The weekly OBV line has trending lower for some time now and the Moving Average Convergence Divergence (MACD) oscillator just crossed back to a sell signal.
I look for RF to work lower to retest the $7.50-$7.00 area in the weeks ahead. A lasting bottom on RF is going to take time to develop.